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UNBC Retirement Savings Plan Defined Contribution Pension ...

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UNBC Retirement Savings Plan Defined Contribution Pension Plan (DCPP)
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Page 1: UNBC Retirement Savings Plan Defined Contribution Pension ...

UNBC Retirement Savings Plan

Defined Contribution Pension Plan (DCPP)

Page 2: UNBC Retirement Savings Plan Defined Contribution Pension ...

why save? Getting started

my plan Your plan advantage

my investments Investment review Choosing your funds

my account Get involved

Page 3: UNBC Retirement Savings Plan Defined Contribution Pension ...

Saving for Retirement

Page 4: UNBC Retirement Savings Plan Defined Contribution Pension ...

How much money do you need for retirement?

Canadians need 65% to 80% pre-retirement income replacement

Page 5: UNBC Retirement Savings Plan Defined Contribution Pension ...

Retirement income

CPP/OAS

Home

Other Savings

Personal RRSP

UNBC Defined Contribution Pension Plan

primary

Where will your money come from?

supplement

secondary

Page 6: UNBC Retirement Savings Plan Defined Contribution Pension ...

• Indexing: Your CPP are indexed annually, OAS is indexed quarterly

• CPP payments are based on how much and how long you have contributed

• Request your CPP contributions & benefit statement from: www.hrsdc.gc.ca

• OAS payments are based on your Canadian residency

2008 CPP/QPP OAS

Maximum Monthly

$884.58/mth

($10,615/yr)

$502.31/mth

($6,027.72/yr)

Average

$480.86/mth

($5,770/yr)

$476.37/mth

($5,716/yr)

Government benefits

Page 7: UNBC Retirement Savings Plan Defined Contribution Pension ...

Benefits of starting early

Assumes a 6% rate of return

Page 8: UNBC Retirement Savings Plan Defined Contribution Pension ...
Page 9: UNBC Retirement Savings Plan Defined Contribution Pension ...

Insert Slide Title HereResponsibilities

Sponsor the plan

• Pension Committee• Plan design • Selecting Investment

Managers• Selecting funds• Selecting the

record keeper• Monitoring the plan

UNBC

Record keeping

• Preparing statements• Developing tools• Member education• Tracking your

investments• Tax receipts

Sun Life Financial

InvestmentManagers

Funds

• Performing research• Creating the fund• Selecting the stocks

or bonds• Buying and selling

You/member

Your Account

• Making contributions• Understanding

investments• Choosing investments• Monitoring savings and

investments• Filing personal

information updates• RRSP limits• Paying investment

management fees • Paying

withdrawal fees

Page 10: UNBC Retirement Savings Plan Defined Contribution Pension ...

Your RRSP limits

Lesser of 18%of previous

years earningsor $20,000

PensionAdjustment

(PA)*

UnusedRRSP

Room (if any)+-

$22,0002010

$21,0002009

$20,0002008

* Pension Adjustment (PA) shown on T4. Applies to DCPP contributions.

Page 11: UNBC Retirement Savings Plan Defined Contribution Pension ...

Registered Retirement Savings Plan (RRSP)

Where contributions are directed….

UNBC Registered Pension Plan

EmployeeCompulsory

UNBC

• 3% of earnings up to the YMPE• 5% above the YMPE• Additional Voluntary (no match)• Transfers-in allowed

• 8% of earnings up to the YMPE• 10% above the YMPE

YMPE = Yearly Maximum Pensionable Earnings, $44,900.

Page 12: UNBC Retirement Savings Plan Defined Contribution Pension ...

Registered Retirement Savings Plan (RRSP)

What does this mean to me ?

Assumption:

Mary earns $65,000 annually.

Mary $44,900 x 3% = $1,263.00Mary $ 7,900 x 5% = $ 395.00

UNBC $44,900 x 8% = $3,368.00UNBC $ 7,900 x 10% = $ 790.00

Total Benefit = $5,816.00

Page 13: UNBC Retirement Savings Plan Defined Contribution Pension ...

Registered Retirement Savings Plan (RRSP)

When do I own the funds?

Mary $44,900 x 3% = $1,263.00Mary $ 7,900 x 5% = $ 395.00

UNBC $44,900 x 8% = $3,368.00UNBC $ 7,900 x 10% = $ 790.00

Total Benefit = $5,816.00

Vesting

• Vesting refers to when you own the University contributions. You are vested after 2 years of continuous service with the University.• If you leave UNBC prior to 2 years of continuous service, contributions are not yours to take with you.• You always own your contributions.

Locking in

• Once you have been contributing into the DCPP for 2 years, the funds become locked in which means they are not available for you to use until you retire.

Page 14: UNBC Retirement Savings Plan Defined Contribution Pension ...

What happens if you…

Leave UNBC• Transfer your DCPP to:

• Locked in account with Sun Life Financial - CHOICES

• Locked in account at another financial institution

• A new employer (if permitted)

Retire from UNBC• Transfer your DCPP to:

• A LIF (Life Income Fund) with Sun Life Financial - CHOICES

• A LIF at another financial institution

• Purchase an annuity

What happens if you….What happens if you….

Page 15: UNBC Retirement Savings Plan Defined Contribution Pension ...

Understanding Fees

Fees in your plan range

High

1.32 %

Low

0.42%

Fund Management Fee(expressed as a % of fund assets you hold)

To view your specific management fees visit www.sunlife.ca/member

Annual Fees

$70.00

Fund Management %

0.70%$10,000

Example

Page 16: UNBC Retirement Savings Plan Defined Contribution Pension ...

Fund Management Fees at Dec. 31, 2007

Fund Name Total Fund Management

Fee

PH&N Balanced Pension Fund 0.70%

Beutel Goodman Balanced Fund 0.76%

McLean Budden Balanced Growth Fund 0.69%

McLean Budden Canadian Equity Fund 0.69%

Beutel Goodman Canadian Equity Fund 0.76%

Beutel Goodman Small Cap Fund 0.76%

McLean Budden Canadian Equity Growth Fund 0.68%

BGI S&P/TSX Composite Index Fund 0.48%

PH&N Bond Fund 0.69%

Page 17: UNBC Retirement Savings Plan Defined Contribution Pension ...

Fund Management Fees at Dec. 31, 2007

Fund Name Total Fund Management

Fee

CI American Value Fund 1.32%

BGI US Equity Index Fund 0.48%

McLean Budden US Equity Fund 0.74%

McLean Budden Global Equity Fund 0.70%

Sun Life Financial Money Market Fund 0.42%

SLA 1 YR Guaranteed Fund N/A

SLA 3 YR Guaranteed Fund N/A

SLA 5 YR Guaranteed Fund N/A

Page 18: UNBC Retirement Savings Plan Defined Contribution Pension ...

* Assumes a 5.75% real rate of return

Investment management

fee

Annual contributions

Years of contributions

2% $5,000 20

1.5% $5,000 20

1% $5,000 20

1.5%$157,752

1%$167,568

Total contribution: $100,000

2%$148,588

Ending balance

Low Fund Management Fees (FMF) make a difference

Page 19: UNBC Retirement Savings Plan Defined Contribution Pension ...

You get it all when you save through your company plan

Your piggy bank

Your savings account

Your personal RRSPs

UNBC

Lower investment management fees

Access to institutional fund managers

University contributions

Regular payroll contributions

Tax deductible & tax sheltered investment earnings

Immediate tax relief on your contributions

×

× ×××××

×

××××

×

×××

×

Page 20: UNBC Retirement Savings Plan Defined Contribution Pension ...
Page 21: UNBC Retirement Savings Plan Defined Contribution Pension ...

Your steps to investing

1. Understand the basics•types of funds•risk vs. returns•importance of diversification

2. Determine what type of investor you are

3. Choose your funds •refer to the Investment Reports section through your online account

Page 22: UNBC Retirement Savings Plan Defined Contribution Pension ...

Understand risk vs. return

Bonds• Promise to repay debt

• Receives interest

• Various terms to maturity

• Government and corporate

Money market• Federal government debt

• Short term, less than 1 year

Balanced• Mix of cash, bond and equities

• Automatic diversification

Equities• Ownership in company

• Share in company profits

• Canadian or foreign

Page 23: UNBC Retirement Savings Plan Defined Contribution Pension ...

Growth of $100From Jan 1998 to Dec 2007

$247

$146

$184

$124

Source: Morningstar Research Inc.

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Consumer Price Index DEX 91-Day T-Bill Index

DEX Universe Bond Index S&P/TSX Composite Index

Page 24: UNBC Retirement Savings Plan Defined Contribution Pension ...

• Diversification: holding different types of investments in your portfolio• Lower your overall risk by: not putting all of your eggs in one basket

Diversify your investments

Asset Class

ManagerStyle

Sector

ForeignMarkets

Ways you can diversify

Page 25: UNBC Retirement Savings Plan Defined Contribution Pension ...

Think about investing outside of Canada

• Canada Revenue Agency now allows 100 % foreign content in your registered accounts

• Canada represents only 2-3% of the world stock market

• Some foreign markets have historically outperformed Canada over the long-term

• Consider investing outside of Canada as one way to diversify

Page 26: UNBC Retirement Savings Plan Defined Contribution Pension ...

Investment Manager approaches

Active

Objective is to outperform a market index based on research of current market conditions and

company prospectsActively buys and sells securities

in individual funds

Passive/Index

Simply buys and sells assets to match characteristics of an index, fund

performance should be similar to the index, i.e. S&P TSX

Fund Manager applies an Investment “style” to their approach

Fund Management Fees tend to be lower than an Active Fund Manager

Page 27: UNBC Retirement Savings Plan Defined Contribution Pension ...

Investment styles

Value

Focuses on stocks that a fund manager thinks are currently

undervalued in price and will eventually have their worth recognized by the market

Growth

Believes that the single most important thing driving stock prices

is rapidly rising corporate earnings -- and that's what they

look for

If the manager is right, the stockwill increase in price as others

in the market recognize the true value of the stock

If the manager is right, the company’sstock will increase in price as thecompany achieves business and

earnings growth

Page 28: UNBC Retirement Savings Plan Defined Contribution Pension ...

Investment styles

Garp

Growth at a reasonable price- looks for stocks of growth

companies that they can buy for a reasonable price

This is a combination of value and growth investing

Page 29: UNBC Retirement Savings Plan Defined Contribution Pension ...

Dollar cost averaging

Month Amount Price Units purchased

1 $250 $10 25

2 $250 $10 25

3 $250 $11 22.72

4 $250 $12 20.83

5 $250 $11 22.72

6 $250 $13 19.23

7 $250 $14 17.86

8 $250 $13 19.23

9 $250 $14 17.86

10 $250 $12 20.83

11 $250 $10 25

12 $250 $14 17.86

Total $3,000 Avg. price = $11.80 254.14

Market Value = $3,557.96Rate of Return = 18.59%

Dollar cost averaging

Page 30: UNBC Retirement Savings Plan Defined Contribution Pension ...
Page 31: UNBC Retirement Savings Plan Defined Contribution Pension ...

Your guide to choosing funds

• Complete the questionnaire in the Investment Risk Profiler online• www.sunlife.ca/member

• Review your fund choices

online through Morningstar®

• Select your funds according to your

risk tolerance

my money Investment Risk Profiler

Page 32: UNBC Retirement Savings Plan Defined Contribution Pension ...

Your investment fund choices

Asset Class Fund Name RiskFund

Management Style

Money Market/

Guaranteed

• Sun Life Financial 1, 3 & 5 Year Guaranteed• Sun Life Financial Money Market Fund

Low

Low

N/A

N/A

Fixed Income/Bond

• PH&N Bond Fund Low Moderate Active/GARP

Balanced • PH&N Balanced Pension Fund• McLean Budden Balanced Growth Fund• Beutel Goodman Balanced Fund

Moderate

Moderate

Moderate

Active/GARP

Active/Growth

Active/Value

Canadian Equities • Beutel Goodman Small Cap Fund• Beutel Goodman Canadian Equity Fund• BGI S&P/TSX Composite Index Fund• McLean Budden Canadian Equity Growth Fund• McLean Budden Canadian Equity Fund

High

Moderate High

Moderate High

Moderate High

Moderate High

Active/Value

Active/Value

Passive

Active/Growth

Active/GARP

US Equities • BGI US Equity Index Fund• McLean Budden US Equity Fund• CI American Value Fund

Moderate High

Moderate High

Moderate High

Passive

Active/Growth

Active/Value

Foreign

Equities

• McLean Budden Global Equity Moderate High Active/GARP

Page 33: UNBC Retirement Savings Plan Defined Contribution Pension ...

Investment

Type

Investment Option

15% U.S. Equity • BGI US Equity Index Fund• McLean Budden US Equity Fund• CI American Value Fund

15% International Equity • McLean Budden Global Equity

20% Canadian Equity • Beutel Goodman Small Cap Fund• Beutel Goodman Canadian Equity Fund• BGI S&P/TSX Composite Index Fund• McLean Budden Canadian Equity Growth Fund• McLean Budden Canadian Equity Fund

40% Bond/

Fixed Income

• PH&N Bond Fund

10% Guaranteed/

Money Market

• Sun Life Financial Money Market Fund • Sun Life Financial 1,3 & 5 year Guaranteed Fund

Example: A score of 36 to 85 points - Moderate

15%U.S. Equity

20%CDN. Equity

40%Fixed Income

10%Money Market

15%Intl. Equity

Building your own asset mix

Page 34: UNBC Retirement Savings Plan Defined Contribution Pension ...

Rebalance often to match your risk tolerance

10%

International Equity

Canadian Equity

Bonds

45%Bonds 45%

Stocks

45% 45%

10%

35%Bonds

45%

Starting point5%

35% 60%

1 year later

Transfer:10% Cdn Equity to Bonds

5% Cdn Equity to International Equity

60%Stocks

5%

45%

10%

Starting point

45%

Page 35: UNBC Retirement Savings Plan Defined Contribution Pension ...

Fund 2007 2006 2005 2004 2003

Sun Life Money Market Fund

DEX 91 Day Cda Tbill

4.52%

4.43%

4.02%

3.98%

2.62%

2.58%

2.19%

2.30%

2.97%

2.91%

PH&N Bond Fund Fund

DEX Universe Bond

3.18%

3.68%

4.40%

4.06%

7.00%

6.46%

7.32%

7.15%

7.32%

6.69%

Beutel Goodman Balanced Fund

Beutel Balanced Benchmark

0.54%

2.61%

13.63%

12.23%

10.05%

11.24%

10.90%

9.34%

16.15%

14.65%

McLean Budden Balanced Growth Fund

McLean Budden Balanced Benchmark

2.09%

2.55%

13.63%

12.50%

11.36%

12.02%

8.45%

9.47%

14.43%

13.68%

PH&N Balanced Pension Fund

PH&N Balanced Pension Trust Benchmark

0.25%

3.42%

12.39%

12.56%

10.00%

12.27%

10.16%

9.30%

14.54%

13.82%

Beutel Goodman Canadian Equity Fund

S&P/TSX Composite

6.28%

9.83%

16.58%

17.26%

17.67%

24.13%

14.32%

14.48%

28.30%

26.72%

BGI S&P/TSX Composite Index Fund

S&P/TSX Capped Composite (BGI)

9.92%

9.83%

17.40%

17.26%

24.02%

24.13%

14.58%

14.48%

26.66%

26.72%

Fund Performance

Data through 31 Dec 2007

Page 36: UNBC Retirement Savings Plan Defined Contribution Pension ...

Fund 2007 2006 2005 2004 2003

McLean Budden Canadian Equity Fund

BMO/TSX Composite Capped 10%

8.34%

9.83%

18.26%

17.26%

21.19%

24.12%

12.15%

14.48%

25.30%

26.72%

McLean Budden Canadian Equity Growth Fund

BMO/TSX Composite Capped 10%

11.62%

9.83%

21.31%

17.26%

22.90%

24.12%

11.86%

14.48%

30.75%

26.72%

Beutel Goodman Small Cap Fund

BMO Small Cap Blended (Weighted)

2.97%

2.01%

22.33%

16.64%

11.16%

19.68%

14.69%

14.12%

38.19%

42.74%

BGI US Equity Index Fund

S&P 500 Index ( Cdn $)

-10.77%

-10.53%

15.06%

15.33%

1.97%

2.29%

2.52%

2.80%

4.38%

5.26%

CI American Value Fund

S&P 500 C$- Bank of Canada

-1.60%

-10.55%

18.68%

15.74%

5.24%

1.62%

12.15%

3.26%

4.76%

5.29%

McLean Budden US Equity Fund

S&P 500 C$- Bank of Canada

-4.80%

-10.55%

14.85%15.74%

2.95% 1.62%

3.90%

3.26%

7.41%

5.29%

McLean Budden Global Equity Fund

MSCI World C$

-7.85%

-7.08%

19.62%

20.19%

5.67%

7.27%

5.46%

6.85%

8.38%

9.41%

Fund Performance

Data through 31 Dec 2007

Page 37: UNBC Retirement Savings Plan Defined Contribution Pension ...

Dec. 31st 2007 Balances

% of Investment

Dec. 31st 2006 Balances

% of Investment

Balanced $12,358,144.03 30.75% $11,596,625.91 31.19%

B.G. Balanced Fund

MB Balanced Growth Fund

PH&N balanced Pension Fund

815,189.49

1,234,922.29

10,308,032.25

2.03%

3.07%

25.65%

478,042.37

855,795.05

10,262,788.49

1.29%

2.30%

27.61%

Canadian Equity $15,545,558.23 38.68% $11,596,625.91 38.11%

B.G. Canadian Equity Fund

B.G. Small Cap Fund

BGI S&P/TSX Composite Index Fund

MB Canadian Equity Fund

MC Canadian Equity Growth Fund

PH&N Canadian Equity Plus Pension Fund

1,002,926.87

2,304,544.48

1,781,376.34

8,534,858.68

1,921,851.86

n/a

2.5%

5.73%

4.43%

21.24%

4.78%

n/a

699,495.43

2,068,019.58

1,267,602.16

768,961.53

n/a

9,365,184.33

1.88%

5.56%

3.41%

2.07%

n/a

25.19%

Fixed Income $ 3,472,371.60 8.64% 3,008,464.95 8.09%

PH&N Bond Fund 3,472,371.60 8.64% 3,008,464.95 8.09%

Fund Asset Mix

Page 38: UNBC Retirement Savings Plan Defined Contribution Pension ...

Dec. 31st 2007 Balances

% of Investment

Dec. 31st 2006 Balances

% of Investment

Foreign Equity $ 3,572,203.81 8.89% $ 3,547,279.63 9.54%

BGI US Equity Index Fund

CI American Value Fund

MB Global Equity Fund

MB US Equity Fund

308,862.97

746,955.02

2,430,889.57

85,496.25

0.77%

1.86%

6.05%

0.21%

304,685.44

676,244.32

2,523,513.46

42,836.41

0.82%

1.82%

6.79%

0.12%

Guaranteed/Money Market $ 5,241,977.12 13.04% $ 4,853,648.21 13.06%

SLA 1 YR Guaranteed Fund

SLA 3 YR Guaranteed Fund

SLA 5 YR Guaranteed Fund

Sun Life Money Market Fund

375,439.68

494,678.12

766,575.20

3,605,284.12

0.93%

1.23%

1.91%

8.97%

311,296.45

535,513.10

826,819.01

3,180,019.65

0.84%

1.44%

2.22%

8.55%

Total $40,190,254.79 100.00 % $ 37,175,281.73 100.00 %

Fund Asset Mix

Page 39: UNBC Retirement Savings Plan Defined Contribution Pension ...

Saving for retirement

Page 40: UNBC Retirement Savings Plan Defined Contribution Pension ...

Select Resource Centre

Click on My Money Tools

Getting Started

Sign in to www.sunlife.ca/member

Page 41: UNBC Retirement Savings Plan Defined Contribution Pension ...

my information•This is the first screen of the retirement planner

•Some of the information on this screen is pre-populated

my money retirement planner

Page 42: UNBC Retirement Savings Plan Defined Contribution Pension ...

Your personal action plan

my money Retirement Planner

Page 43: UNBC Retirement Savings Plan Defined Contribution Pension ...
Page 44: UNBC Retirement Savings Plan Defined Contribution Pension ...

Keeping you involved

Read your personal statements

• Quarterly member statements

• Personal rates of return

• Transaction history

• Plan information

• Bulletin board

Page 45: UNBC Retirement Savings Plan Defined Contribution Pension ...

Keeping you involved

Education

Internetwww.sunlife.ca/member

Account Access Morningstar

• Investment Risk Profiler• Retirement Planner • Edu-cast• New personal financial

planning tools

• Account balances• Transfer between funds• Secure e-mail• RRSP receipts• On-line statements

• Investment reports

Manage your money on-line

Page 46: UNBC Retirement Savings Plan Defined Contribution Pension ...

Keeping you involved

Call 1-866-733-8612 for access to your account or help understanding your plan

Automated Telephone System

Phone

1-866-733-8612

Customer CareCentre

• Account balances• Rates of return• Market information• Enrolment assistance• Transfer between funds• Change investment allocation

Help is available in 150 languages

Page 47: UNBC Retirement Savings Plan Defined Contribution Pension ...

Investment Information• Capital market performance• Individual fund performance• Investment style, fund and manager updates

Portfolio X-Ray• Analyze different combinations of funds as a single portfolio; including the

effect of asset allocation changes to the portfolio

Fund Compare• Compare and analyze funds in your plan with the full list of available funds

Performance Reports• Generate investment performance reports for your plan’s funds

Getting information about your funds (Morningstar®)

Page 48: UNBC Retirement Savings Plan Defined Contribution Pension ...

Keeping you involved

Withdrawal calculator

Capital Gains vs.RRSP calculator

Mortgage vs. RRSP calculator

RRSP Loancalculator

Do your financial planning online

Page 49: UNBC Retirement Savings Plan Defined Contribution Pension ...

Keeping you involved

Do your financial planning online

OAS claw-backcalculator

RRIF calculator

Annuity calculator

Page 50: UNBC Retirement Savings Plan Defined Contribution Pension ...

Your action plan

1. Use the Investment risk profiler to determine your recommended portfolio allocation

2. Use the Retirement planner to evaluate if your current contributions will meet your retirement goals

3. Review your current portfolio

4. Update your future investment instructions as required

5. Update your existing portfolio as required

6. Update any personal information that is out of date (ie. Beneficiary)

Page 51: UNBC Retirement Savings Plan Defined Contribution Pension ...

Thank you

Questions?


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